VIVIDEND INCOME FUND LIMITED - Declaration of Special Distribution

Declaration of Special Distribution
VIVIDEND INCOME FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration Number 2010/003232/06)
JSE share code: VIF
ISIN: ZAE000150918
(Approved as a REIT by the JSE)
(“Vividend” or “the Company”)
DECLARATION OF SPECIAL DISTRIBUTION
Linked unitholders are referred to the circular
(“Circular”) that was posted to Vividend linked unitholders
(“Linked Unitholders”) on 2 June 2014 relating to, inter
alia, the indivisibly linked schemes of arrangement (the
"Schemes") in terms of section 114 of the Companies Act 71
of 2008, as amended, proposed by the independent board of
directors of Vividend between Vividend and the Linked
Unitholders.
Notice is hereby given that, subject to the Schemes
becoming unconditional and the approval by the Linked
Unitholders of the amendment to the debenture trust deed as
contemplated in the Circular, the directors hereby declare
a gross special distribution of 4.04 cents per linked unit,
in accordance with the debenture trust deed, for the period
1 March 2014 to 31 March 2014, payable to Linked
Unitholders recorded in the register of the Company on
Friday, 18 July 2014. The last day to trade cum
distribution will be Friday, 11 July 2014 and trading will
commence ex distribution on Monday, 14 July 2014.
In respect of dematerialised Linked Unitholders, the
distribution will be transferred to the Central Securities
Depository Participant (CSDP) accounts or brokers' accounts
on Monday, 21 July 2014. Certificated Linked Unitholder
distribution payments will be posted on or about Monday,
21 July 2014.
No dematerialisation or rematerialisation of linked units
may take place between Monday, 14 July 2014, and Friday,
18 July 2014, both days inclusive.
In accordance with Vividend's status as a REIT, Linked
Unitholders are advised that the distribution meets the
requirements of a "qualifying distribution" for the
purposes of section 25BB of the Income Tax Act, 58 of 1962
(Income Tax Act). Accordingly, qualifying distributions
received by local tax residents must be included in the
gross income of such Linked Unitholders (as a non-exempt
dividend in terms of section 10(1)(k)(aa) of the Income Tax
Act), with the effect that the qualifying distribution is
taxable as income in the hands of the Linked Unitholder.
These qualifying distributions are, however, exempt from
dividend withholding tax in the hands of South African tax
resident Linked Unitholders, provided that the South
African resident Linked Unitholders have provided the
following forms to their CSDP or broker, as the case may
be, in respect of uncertificated linked units, or the
transfer secretaries, in respect of certificated linked
units:
a) a declaration that the distribution is exempt from
dividends tax; and
b) a written undertaking to inform the CSDP, broker or the
transfer secretaries, as the case may be, should the
circumstances affecting the exemption change or the
beneficial owner cease to be the beneficial owner, both
in the form prescribed by the Commissioner for the
South African Revenue Service.
Linked Unitholders are advised to contact their CSDP,
broker or the transfer secretaries, as the case may be, to
arrange for the abovementioned documents to be submitted
prior to payment of the distribution, if such documents
have not already been submitted.
Qualifying distributions received by non-resident Linked
Unitholders will not be taxable as income and instead will
be treated as ordinary dividends but which are exempt in
terms of the usual dividend exemptions per section 10(1)(k)
of the Income Tax Act. It should be noted that until
31 December 2013, qualifying distributions received by non-
residents from a REIT were not subject to dividend
withholding tax. From 1 January 2014, any qualifying
distribution received by a non-resident from a REIT will be
subject to dividend withholding tax at 15%, unless the rate
is reduced in terms of any applicable agreement for the
avoidance of double taxation (DTA) between South Africa and
the country of residence of the Linked Unitholder.
Assuming dividend withholding tax will be withheld at a
rate of 15%, the net amount due to non-resident Linked
Unitholders will be 3.434 cents per linked unit. A reduced
dividend withholding tax rate in terms of the applicable
DTA may only be relied on if the non-resident Linked
Unitholder has provided the following forms to their CSDP
or broker, as the case may be, in respect of the
uncertificated linked units, or the transfer secretaries,
in respect of certificated linked units:
a) a declaration that the dividend is subject to a reduced
rate as a result of the application of a DTA; and
b) a written undertaking to inform their CSDP, broker or
the transfer secretaries, as the case may be, should the
circumstances affecting the reduced rate change or the
beneficial owner cease to be the beneficial owner, both
in the form prescribed by the Commissioner for the South
African Revenue Service.
Non-resident Linked Unitholders are advised to contact
their CSDP, broker or the transfer secretaries, as the case
may be, to arrange for the abovementioned documents to be
submitted prior to payment of the distribution, if such
documents have not already been submitted, if applicable.
Local tax resident Linked Unitholders as well as non-
resident Linked Unitholders are encouraged to consult their
professional advisors should they be in any doubt as to the
appropriate action to take.
Vividend linked units in issue at the date of declaration
of the special distribution: 268 331 688
Vividend income tax reference number: 9142063180
Cape Town
27 June 2014
Sponsor to Vividend
PSG Capital
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